Business Analytics Exam Review
Course Introduction
Business Analytics is a multidisciplinary course that explores the concepts, tools, and techniques used to analyze data and support business decision-making. Students will learn how to collect, process, and interpret data to uncover insights, identify trends, and solve real-world business problems. The course covers fundamental areas such as descriptive, predictive, and prescriptive analytics using statistical analysis, data visualization, and advanced software tools. Emphasis is placed on applying analytical methods to business scenarios in marketing, finance, operations, and management, empowering students to make data-driven decisions and enhance organizational performance.
Recommended Textbook
Statistical Techniques in Business and Economics 16th Edition by Douglas Lind
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Chapter 1: What Is Statistics
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Sample Questions
Q1) When TV advertisements report "2 out of 3 dentists surveyed indicated they would recommend Brand X toothpaste to their patients," an informed consumer may question the conclusion because the:
A) Sample was only 5 dentists.
B) Sample of dentists is clearly explained.
C) Advertisement does not include the total number of dentists surveyed.
D) Conclusion is not illustrated with a graph.
Answer: C
Q2) Describe the difference between a population and a sample.
Answer: A population is the entire set of individuals or objects that could be observed or measured. A sample is a subset or portion of a population.
Q3) An ordinal level of measurement implies some sort of ranking.
A)True
B)False
Answer: True
Q4) Among the many classes held at your college or university, your statistics class has been selected for a study. This one class is referred to as a ____________.
Answer: sample
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3
Chapter 2: Describing Data: Frequency Tables, Frequency
Distributions, and Graphic Presentation
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Sample Questions
Q1) The midpoint of a class interval is also called a class ________.
Answer: mark
Q2) In a bar chart, the heights of the bars represent the frequencies in each class.
A)True
B)False
Answer: True
Q3) For a relative frequency distribution, relative frequency is computed as _____________.
A) The class width divided by the class interval
B) The class midpoint divided by the class frequency
C) The class frequency divided by the class interval
D) The class frequency divided by the total frequency
Answer: D
Q4) To convert a frequency distribution to a relative frequency distribution, divide each class frequency by the number of classes.
A)True
B)False
Answer: False
Q5) To construct a bar chart, the class frequencies are plotted on the _________.
Answer: Y or vertical axis
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Chapter 3: Describing Data: Numerical Measures
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Sample Questions
Q1) The measure of central location that requires the data to be ranked before it is possible to determine it is called the _________.
Answer: median
Q2) The square root of the variance is called the ______. Answer: standard deviation
Q3) The mean monthly income of a group of college students is $500; the standard deviation is $50. And the mean monthly income is normally distributed. Approximately, what percent of the incomes will lie between $400 and $600?
Answer: 95%
Explanation: First, note that $600 is two standard deviations above the mean, found by ($600 - $500)/50 = 2. The value of $400 is two standard deviations below the mean. Using the Empirical rule, the mean plus and minus 2 standard deviations includes about 95% of the observations.
Q4) The standard deviation is the positive square root of the variance.
A)True
B)False
Answer: True
Q5) When computing the mean for grouped data, the numerator is the sum of
Answer: the product of class frequencies and midpoints
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Chapter 4: Describing Data: Displaying and Exploring Data
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Sample Questions
Q1) What is the possible range of values for Pearson's coefficient of skewness?
A) -1 and +1
B) -3 and +3
C) 0% and 100%
D) Unlimited values
Q2) A dot plot is an easy way to represent the relationship between two variables.
A)True
B)False
Q3) The following stem-and-leaf display reports the number of boats shipped per week by Ottertail Boats, Inc.
11| 1 5 9
12| 0 1 2 2 6 9
13| 0 1 2 3 4 5 5 7 8 8 9 14| 2 6 8
15| 0 1 2 4 5 7 8 9
16| 1 5 7 9
List the actual values in the fourth class.
Q4) A box plot shows the skewness of a distribution.
A)True
B)False
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Chapter 5: A Survey of Probability Concepts
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Sample Questions
Q1) The ABCD football association is considering a Super Ten Football Conference. The top 10 football teams in the country, based on past records, would be members of the Super Ten Conference. Each team would play every other team in the conference during the season and the team winning the most games would be declared the national champion. How many games would the conference commissioner have to schedule each year? (Remember, Oklahoma versus Michigan is the same as Michigan versus Oklahoma.)
A) 45
B) 50
C) 125
D) 14
Q2) If P(A) = 0.62, P(B) = 0.47, and P(A or B) = 0.88, then P(A and B) = _____.
A) 0.2914
B) 1.9700
C) 0.6700
D) 0.2100
Q3) Compare and contrast the classical, empirical, and subjective approaches to assigning probabilities.
Q4) In flipping a fair coin, what is the probability of either heads or tails on one toss?
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Chapter 6: Discrete Probability Distributions
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Sample Questions
Q1) Sponsors of a local charity decided to attract wealthy patrons to its $500-a-plate dinner by allowing each patron to buy a set of 20 tickets for the gaming tables. The chance of winning a prize for each of the 20 plays is 50-50. If you bought 20 tickets, what is the chance of winning 15 or more prizes?
A) 0.250
B) 0.021
C) 0.006
D) 0.750
Q2) The binomial probability distribution is always negatively skewed.
A)True
B)False
Q3) A measure of the long-run average value of a random variable used to represent the central location of a probability distribution is called a(n) _____________.
A) population variance
B) population standard deviation
C) expected value
D) coefficient of variation
Q4) For the hypergeometric distribution there are ________________ possible outcomes.
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Chapter 7: Continuous Probability Distributions
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Sample Questions
Q1) A sample of 500 part-time students revealed that their annual incomes were normally distributed with a mean income of $30,000 and a standard deviation of $3,000. The number of students who earned more than $36,000 was ______.
Q2) A normally distributed random variable has _________.
A) Any value between - and + .
B) Discrete values.
C) Any value between specified minimum and maximum values.
D) Only two values, success and failure.
Q3) A new extended-life light bulb has an average life of 750 hours, with a standard deviation of 50 hours. If the life of these light bulbs approximates a normal distribution, about what percent of the distribution will be between 600 hours and 900 hours?
A) 95%
B) 68%
C) 34%
D) 99.47%
Q4) Describe the uniform distribution.
Q5) In the exponential distribution, the mean and standard deviation are equal to ______________.
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Chapter 8: Sampling Methods and the Central Limit
Theorem
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Sample Questions
Q1) The Office of Student Services at a large western state university maintains information on the study habits of its full-time students. Their studies indicate that the mean amount of time undergraduate students study per week is 20 hours. The hours studied follows the normal distribution with a standard deviation of six hours. Suppose we select a random sample of 144 current students. What is the standard error of the mean?
A) 0.50
B) 6.00
C) 0.25
D) 2.00
Q2) A marketing firm is studying consumer preferences for winter fashions in four different months. From a population of women 18 to 21 years of age, a random sample of 100 women was selected in January. Another random sample of 100 women was selected in March. Another random sample of 100 women was selected in June. Another random sample of 100 women was selected in September. What is the sample size?
A) 4
B) 100
C) 400
D) 1
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Chapter 9: Estimation and Confidence Intervals
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Sample Questions
Q1) When the population standard deviation is unknown, a __________ statistic is used to compute a confidence interval.
Q2) A sample of 500 students is selected from a known population of 15000 students to construct a 99% confidence interval for the average SAT score. What correction factor should be used to compute the standard error?
A) 0.9499
B) 0.9832
C) 2.5760
D) Cannot be determined
Q3) A random sample of 42 college graduates revealed that they worked an average of 5.5 years on the job before being promoted. The sample standard deviation was 1.1 years. Using the 0.99 degree of confidence, what is the confidence interval for the population mean?
A) 5.04 and 5.96
B) 5.06 and 5.94
C) 2.67 and 8.33
D) 4.40 and 6.60
Q4) A sample mean is a _______________ estimate of the population mean.
Q5) A finite population correction factor is used to adjust the _________________.
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Chapter 10: One-Sample Tests of Hypothesis
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Sample Questions
Q1) If the null hypothesis is true and the researchers reject it, a ________ error has been made.
Q2) The mean annual income of certified welders is normally distributed with a mean of $50,000 and a population standard deviation of $2,000. The ship building association wishes to find out whether their welders earn more or less than $50,000 annually. The alternate hypothesis is that the mean is not $50,000. If the level of significance is 0.10, what is the decision rule?
A) Do not reject the null hypothesis if computed z lies between -1.645 and +1.645; otherwise, reject it.
B) Do not reject the null hypothesis if computed z is greater than 1.645; otherwise, reject it.
C) Do not reject the null hypothesis if computed z lies between -1.960 and +1.960; otherwise, reject it.
D) Reject the null hypothesis if computed z is below -1.960; otherwise, reject it.
Q3) A test statistic for a hypothesis, H<sub>0</sub>: µ = 10, computes the standardized difference between the hypothesized population mean and the
Q4) How is a significance level determined and how is it related to Type I error?
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Chapter 11: Two-Sample Tests of Hypothesis
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Sample Questions
Q1) When testing the difference between two dependent population means, the test statistic is based on a ______________.
A) Pooled variance
B) Standard deviation of the differences
C) Pooled proportion
D) Sum of the population variances
Q2) For hypotheses that compare two population means, what test statistic is used when the population standard deviations are known?
Q3) For hypotheses that compare two population means, when is a pooled variance used?
Q4) If samples taken from two populations are dependent, then a test of ______ differences is applied.
Q5) When testing for a difference between the means of two dependent samples, n<sub>1</sub> and n<sub>2</sub> are ________________.
Q6) If two dependent samples of size 20 are used to test the difference between the means, the degrees of freedom for a t-statistic are 19.
A)True
B)False
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Chapter 12: Analysis of Variance
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Sample Questions
Q1) In a study of protein breakfast bars, five bars from each of three brands were tested to see if the mean amount of protein per bar differs among the brands. The F critical value for = 0.05 is _____.
Q2) A company compared the variance of salaries for employees who have been employed for 5 years or less with employees who have been employed for 10 years or more. They randomly selected 21 employees with 5 years or less experience and 15 employees with 10 years or more experience. The standard deviation for the group with 5 years or less experience was $2,225; the standard deviation for the group with 10 years or more experience was $1,875. Using the 0.05 significance level, what is the F critical value for the hypothesis test?
Q3) What is the advantage of using ANOVA to test for differences among treatment means rather than testing all possible pairs of treatment means?
Q4) When H<sub>0</sub>: is rejected in ANOVA, we compute ____________ to identify pairs of means that differ.
Q5) The number of mean square errors summarized in a two-way ANOVA table is _______. They are called _______.
Q6) In a two-way ANOVA, when is an interaction source of variance included?
Q7) An ANOVA has three sources of variation. They are _____, _____, and _____.
Page 14
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Chapter 13: Correlation and Linear Regression
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Sample Questions
Q1) In the regression equation, what does the letter "b" represent?
A) The Y-intercept
B) The slope of the line
C) Any value of the independent variable that is selected
D) The value of Y when X = 0
Q2) If there is absolutely no relationship between two variables, Pearson's r will equal _____.
Q3) Which of the following are the same between a confidence interval and a prediction interval?
A) The formulas are the same.
B) They both use the standard error of estimate.
C) They both provide a confidence interval for the mean.
D) A confidence interval and prediction interval are the same width.
Q4) If all the plots on a scatter diagram lie on a straight line, what is the standard error of estimate?
A) -1
B) +1
C) 0
D) Infinity
Q5) The population correlation coefficient is represented by ____.
Page 15
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Chapter 14: Multiple Regression Analysis
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Sample Questions
Q1) Stepwise regression analysis is a method that assists in selecting the most significant variables for a multiple regression equation.
A)True
B)False
Q2) The coefficient of determination measures the proportion of ____________.
A) Explained variation relative to total variation
B) Variation due to the relationship among variables
C) Error variation relative to total variation
D) Variation due to regression
Q3) Multiple regression analysis is used when one independent variable is used to predict values of two or more dependent variables.
A)True
B)False
Q4) A correlation matrix shows individual correlation coefficients for all pairs of variables.
A)True
B)False
Q5) What-statistic is used to assess multicollinearity in multiple regression analysis?
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Chapter 15: Nonparametric Methods: Nominal Level
Hypothesis Tests
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Sample Questions
Q1) The computed value of a chi-square statistic is always positive because the numerator is the difference between the observed frequencies and the expected frequencies ______________.
Q2) If an employee wanted to investigate the relationship between performance rating and gender, what type of analysis should be used?
Q3) Based on the Nielsen ratings, the local CBS affiliate claims its 11 p.m. newscast reaches 41% of the viewing audience in the area. In a survey of 100 viewers, 36% indicated that they watch the late evening news on this local CBS station. What is the null hypothesis?
A) H<sub>0</sub>: = 0.36
B) H<sub>0</sub>: = 0.41
C) H<sub>0</sub>: 0.36
D) H<sub>0</sub>: µ = 0.41
Q4) The variance of the chi-square distribution is equal to one.
A)True
B)False
Q5) The purpose of pooling the sample proportions when testing the difference between two population proportions is to ___________.
Q6) The shape of the chi-square distribution is _________________.
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Chapter 16: Nonparametric Methods: Analysis of Ordinal
Data
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Sample Questions
Q1) The Wilcoxon signed-rank test can replace the paired t test when the assumptions for t cannot be met.
A)True
B)False
Q2) A nonparametric test cannot be applied when the data are:
A) nominal.
B) ordinal.
C) interval.
D) ratio.
Q3) In a market research study involving 11 people, 7 preferred Product X, 3 preferred Product Y, and 1 expressed no preference. A sign test is selected using the 0.05 level of significance. What is the null hypothesis?
Q4) A nonparametric equivalent of a version of the ANOVA test, which tests the hypothesis that several population means are equal is known as the:
A) Wilcoxon ranked-sum test
B) Spearman's coefficient of rank correlation
C) Kruskal-Wallis test
D) Sign test
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Q5) In a sign test, the test statistic is based on the _______________ distribution.
Chapter 17: Index Numbers
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Sample Questions
Q1) In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the real income in 2009?
Q2) A major disadvantage of the unweighted price index is that ___________________________.
Q3) The S&P 500 is a _______________________.
Q4) Suppose your annual 2005 salary was $95,000 and your 2010 salary was $125,000. Assume the annual CPI rose from 177.1 to 215.9 during this period of time. What was the purchasing power of the dollar in 2005?
Q5) In January 2004, the price of coffee was $0.74 per pound. By January 2011, the price of coffee had increased to $2.63. The simple index is about ______________.
A) 0.48
B) 0.28
C) 355
D) 189
Q6) The index that combines the advantages of two popular weighted indices is called ____________________.
Q7) _____ is the usual index number associated with the base period for the CPI.
Page 19
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Chapter 18: Time Series and Forecasting
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Sample Questions
Q1) Autocorrelation is measured by the trend component of a time series.
A)True
B)False
Q2) Data that increases by equal percentages over a period of time appears as a ____________ on an arithmetic scaled graph.
Q3) A graph of a deseasonalized time series does NOT show ________.
Q4) The _____________ method is useful in smoothing out a time series.
Q5) For the third quarter, the sales are 2,500 units; the seasonal index for the quarter is 1.20. What are the deseasonalized sales for the quarter?
A) 1,739
B) 2,520
C) 2,500
D) 2,083
Q6) Autocorrelation can be corrected by using a ________.
Q7) A useful method for eliminating fluctuations in a time series is computing a ______.
Q8) When the null hypothesis is rejected based on the Durbin-Watson statistic, what types of problems occur in regression analysis?
Page 20
Q9) What is the difference between seasonal and cyclical variation in a time series?
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Chapter 19: Statistical Process Control and Quality Management
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Sample Questions
Q1) A major distributor buys shoes from a supplier. The distributor randomly samples the shoes to inspect for quality. The distributor's specifications state that a delivery of 50 pairs of shoes will be accepted only if the number of defective pairs of shoes in a sample of 5 pairs is two or less. Based on the sampling plan, what is the probability of accepting the delivery of 50 pairs of shoes if the actual percent defective is 0.40?
Q2) The manager of a restaurant inspects a delivery of steaks based on the expectation that each steak weighs eight ounces. Is this an example of acceptance sampling or statistical process control? Explain why.
Q3) A fishbone diagram classifies potential causes into categories. What are they?
A) Chance and assignable variation
B) Methods, materials, equipment, and personnel
C) Percent defective and percent non-defective
D) Causes and effects
Q4) A c-bar chart shows the percent of the production that is defective.
A)True
B)False
Q5) A _________ chart portrays the number of defects per unit of production.
Page 21
Q6) A Pareto chart is typically skewed to the ________________.
Q7) A range chart shows the variation of ____________.
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Chapter 20: An Introduction to Decision Theory
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Sample Questions
Q1) Optimists advocate a maximin strategy.
A)True
B)False
Q2) Optimists advocate a maximax strategy.
A)True
B)False
Q3) A maximax strategy will always choose the act or alternative that:
A) maximizes the expected monetary value.
B) minimizes the maximum regret or opportunity loss.
C) maximizes the potential payoff regardless of uncertainty.
D) guarantees a payoff for any state of nature.
Q4) The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Since this seedless watermelon costs $4, will sell for $7, and is highly perishable, he only expects to sell between six and nine of them. What is the opportunity loss for purchasing six watermelons when the demand is for eight watermelons?
A) 0
B) 3
C) 4
D) 6
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